A Strategy to Strengthen the U.S. Lamb Industry, Feedback Needed

By AMY TRINIDAD

Sheep Industry News Editor

(Oct. 1, 2013) “This marks the beginning of change for the American sheep industry,” relays Bob Ludwig, consultant with The Hale Group, who has considerable experience helping a wide variety of food industry entities with strategic planning. Ludwig serves as the facilitator and lead of the Lamb Industry Assessment Study which recently met for the third time.

In previous meetings of the industry advisory group, which is made up of all sectors of the lamb industry – producers from the East and West to feeders and packers – the major challenges facing the American lamb industry were discussed at length. Strategies to strengthen the U.S. lamb industry and increase its competitive advantage were also discussed and determined. The ultimate goal of this meeting was to nail down the objectives and action steps that support the four high-level goals the group developed in its previous meeting. Those goals are:

Product characteristics: Reduce the fat content and improve the consistency of American lamb products as defined by the lamb quality audit.

Demand creation: Achieve a significant increase in demand for American lamb meat as measured by the demand index.

Productivity improvement: Achieve a significant increase in industry productivity with metrics to be defined.

Industry collaboration: Work toward a common industry goal of meeting consumer desires rather than short-term self-interest.

The essence of this effort is to stimulate collaborative industry action to reverse the decline of the American lamb industry. Therefore, in July the industry was asked to provide feedback on the progress report; however, as Ludwig describes it, he found the very low level of responses to the work that has been done thus far troubling.

Out of the comments that were received, a few stood out. They include: “It’s too polite. It doesn’t describe the lamb industry’s situation bluntly enough.” “The industry advisory group, representing different industry sectors, will find it difficult to reach consensus.” “The Hale Group should give their recommendations based on consulting in many other agricultural sectors.”

“Therefore, this presentation is more blunt, and the recommendations are those The Hale Group proposes based partially on input from the industry advisory group and the industry at large,” says Ludwig, “but also The Hale Group’s professional experience.”

Also, due to the low input from the lamb industry at large, the schedule for the remainder of the project has been altered. The strategic implementation plan that was developed at the August meeting is now available for industry comment once again through the end of October. The final report is to be finished by the end of November and presented at the American Sheep Industry Association/National Lamb Feeders Association annual meeting in January.

“We are soliciting for widespread reaction to the draft report from the entire lamb industry,” explains, Megan Wortman, executive director of the American Lamb Board (ALB). “We are planning targeted conference calls to specific groups within the industry and will be distributing a survey in October to improve these recommendations and action steps.”

Ludwig described two possible visions for the future of the U.S. lamb industry. The first consisted of an investment into the future with major changes in the way the industry works which creates growth and profitability. The second, and the way the industry may end up if it continues on the path “we’ve always done it this way,” consists of further declines with losses in infrastructure and increases in imports.

To make a positive change in the industry, Ludwig explains that the packers must lead. “They are the most concentrated and are the channel gate-keeper in the traditional lamb market, but the producers need to respond.”

To achieve this change, conceptual changes are required to take place he says. These changes include:

The consumers’ definition of value must drive the entire industry.

Producers must view themselves as being primarily in the meat business.

Producers and all industry participants must be paid based on quality, not quantity.

The industry must be profitable on purely economic terms with no expectation of future financial support from the government.

Lamb producers must make decisions based on “the numbers” and sound analysis, not intuition.

The sheep industry must make productivity improvements rapidly to “make up for lost time” in comparison to foreign producers.

Longer-term, collaborative relationships between all industry sectors must characterize the industry rather than short-term profit taking.

Participants must take the long-term view, instead of maximizing short-term profit today.

The objectives (listed in random order) for prioritization to support the four ultimate goals are:

explore alternative paths to market;

reduce seasonality of the lamb industry;

initiate a Rapid Response, Industry-Wide Communication Team;

install electronic grading at packing plants;

build volume and value of lamb exports;

support non-traditional sheep producers;

develop a brand for American lamb;

conduct a lamb quality audit;

promote quantitative genetic selection among producers;

develop production metrics to measure productivity;

adopt value-based pricing for carcasses;

update the lamb demand index;

develop a long-term plan for research and producer education; and

develop value-added products.

The execution process of these objectives is of major concern to all those involved in the study. As Ludwig describes this project, “This is the most unique group I have ever worked with because there is not one decision maker. In this instance, we are talking about thousands of decision makers and that makes it tough to play ball.”

In addition, because the industry advisory group has no authority for mandating change, all of the numerous sectors of the U.S. lamb industry must collaboratively work together to implement the roadmap. Therefore, the group agreed on the development of a Lamb Industry Roadmap Implementation Team. The goal behind this group will be to monitor all industry participants’ progress on implementation and address tensions as they arise.

Over the next two years, it has been suggested that Ludwig serve on the implementation team. In addition, the group is requesting that each of the sheep industry’s organizations devote a significant amount of time to the roadmap implementation over the next few years.

“This plan will require a major ‘sea change’ for the U.S. lamb industry,” explains Ludwig. “The hard work of execution still lies ahead but I sense there is a consensus among this group, which is made up of people from very different sectors of the industry, that we’ve got the framework for a great roadmap.”

By the conclusion of the meeting there was an optimistic feeling among the advisory committee for the Lamb Industry Assessment Study as each member expressed both their concerns and optimism.

“At Superior Farms, we are looking forward to participating throughout the industry to help these goals come to fruition,” says Gary Pfeiffer, executive vice president of Superior Farms.

“I am a strong believer that this plan will make a positive impact on our industry,” relays Pierce Miller, producer from Texas. “We have identified areas of concern, the players and tools to make the needed changes within set timelines. As with any good strategic plan, it may have to be altered as events dictate.”

“From a whole industry standpoint, I see a lot of value coming out of this. What many eastern producers may not look at is the long-term viability of the industry. If we don’t address those issues and don’t keep producers all across the country in the sheep business, we are going to lose infrastructure,” says Kathy Soder, Pennsylvania producer, explaining if that occurs, producers in the East will have issues buying equipment or pharmaceuticals and getting shearers.

“We have a bigger vision for this roadmap than just survival of our industry, we are working on an investment in our future,” says Dan Lippert, ALB chair, stressing the significance of industry involvement and feedback.

A number of conference calls will take place with the various sheep industry organizations through October to get feedback on the study’s objectives. In addition, a short survey will be distributed by Oct. 5 to producers to garner more input from the thousands of decisions makers in the field.

The presentation that describes the goals in more detail, along with the plan’s objectives and action steps, is available at www.lambcheck off.com. This will be the last time the industry is asked for input in the development of this roadmap to strengthen the for-profit, lamb-for-meat industry in the United States.

ASI

ASI keeps sheep industry members updated on ASI activities and industry news by regularly distributing and updating various information pieces and sources.